September has not even ended, and another executive of HSBC is headed out the door. After much speculation on Michael Geoghegan’s future, the Financial Times this morning report that HSBC’s CEO will resign at the end of the year. HSBC’s culture has been to assign group CEOs as the chairman, however that seemed highly unlikely in Geohegan’s case which caused reports to be published in the media about Geohegan giving the board an ultimatum, which the group denied immediately. According to the Financial Times, head of HSBC’s investment banking unit, Stuart Gulliver will replace Geoghegan as CEO.
HSBC’s stock is down 6.3% on the London Stock Exchange YTD, while the ADS is down 7% on the New York Stock Exchange. Despite its USA retail operations, HSBC Bank USA N.A., taking a significant hit during the global financial crisis, the group overall managed to be one of the few banks whose future was not in doubt. The company reported 1H profits had doubled to $6.76 billion, but reported higher costs which caused concern to a lot of investors and analysts. The stock has been in a tight trading range since the summer of 2009, and a boardroom battle can prove to take a toll on its stock in the near future, especially with uncertainty about a double dip recession.
Disclosure: No positions